The Green Sheet Online Edition

May 13, 2013 • Issue 13:05:01

Street SmartsSM

Think like an aggregator

By Dale S. LaszigCastles Technology Co. Ltd.

We hear significant buzz these days about aggregators: game-changers like PayPal Inc. and Square Inc. that create one giant merchant account and then break it into millions of tiny pieces so that the smallest of merchants can finally get into the credit card processing game.

Actually, many successful merchant level salespeople (MLSs) have adopted similar approaches to territory management. In fact, since we've been in the credit card industry longer than some of these upstarts, we could say that PayPal and Square have borrowed a page from the MLS playbook.

Assess market needs

Let's take a high-level look at the dynamics. Why do aggregators exist? As the saying goes, there's strength in numbers. Aggregators are usually created to fulfill the needs of a buying group whose members would not be eligible for volume discounts if they applied for products or services on their own. What are some common examples of aggregators? Costco Wholesale Corp., BJ's Wholesale Club Inc., and PayPal are just a few.

As many of us have learned in our years of selling, dealing with micro merchants is tricky and requires different kinds of skills than those used when targeting a major account. Veteran sales pros can vouch for the importance of racking up little base hits consisting of one or two call closes in the more formalized, strategic approach to targeting major accounts.

This begins with research, continues through gaining access to a decision maker, and culminates with a formal proposal that describes a business or solution that meets the target's needs.

Tailor your approach

What's the likelihood of applying that process or even presenting a proposal to an e-commerce startup based in someone's garage? Not happening, according to broad consensus in our previous discussion thread in GS Online's MLS Forum.

Forum member CLEARENT wrote that among the many reasons cited for dispensing with formalities when prospecting small merchant accounts, is that sometimes requests for proposals can be a form of stall: "In my opinion, that is often just an effort of a merchant to get you to leave," he wrote. "[T]hey really want to say no but are too good-hearted to come out and say it.

"Best to give them permission to say no, than [try to] see if they do want something."

So what are some ways that MLSs aggregate their prospecting efforts to improve productivity and increase closing ratios? Here are essential steps I've observed:

Create a giant profile: Whether the approach is being taken in a geographic territory or an industry vertical, there are marked similarities in plan and approach. What are some similarities from one merchant to another in your targeted area? Let's say you have 25 small coffee shops in your geographic area, or that you have decided to specialize in the coffee shop vertical market.

Know your market: Following is an example CARDPLAYER provided of a four-part value
proposition for a busy coffee shop:

Slow transaction times on credit/debit sales are bogging down POS throughput at the busy hours of the business.

Acme ISO will install a new 'Whizbang 3000' that utilizes IP technology to reduce processing times on credit/debit sales to 2 seconds or less.

Acme will deliver, program and install the new terminal, and train merchant's staff on how to use it. Merchant is responsible for running an Ethernet line from the router in the supply room to the front counter where the terminal will be located.

Processing fees will be as follows, etc.

This value statement may be somewhat generic, but it addresses some common challenges of this industry segment, doesn't it? And by demonstrating to the prospect that he's done some homework on coffee shops before walking in the door during nonpeak hours, CARDPLAYER is leading with solution and not price.

"My proposal now explains the value of what I am selling, not just the price of my service compared to the current service," CARDPLAYER wrote. "When all I talk about is price, as in a savings analysis, the service I am providing is not mentioned and therefore is presumed equal in all other regards.

"I do quote a price in my example above, but what I don't do is compare it to the merchant's current price. The merchant can do their own price analysis. I also wouldn't hesitate to leave this proposal with the merchant, since it has actionable info in it.

"The merchant may call their current provider and ask if they offer an IP terminal, but they are not as likely to do that as they would be if all they had to ask for was a lower price."

Lead with value: When you lead with value, you change the whole dynamic of the conversation with a prospective merchant customer. Just because the merchant's business is small doesn't mean you have to take a commoditized approach or make the conversation all about price.

On the contrary, emphasizing value will get you better results no matter what size of merchant you are targeting. Value is scalable. If your territory has a disproportionately high number of small accounts, what can you learn about their industries or geographic areas?

Are they subject to power outages due to extreme weather? Why not show some disaster recovery solutions? Do they live in remote areas without access to broadband or dial infrastructure? How does their area look on a wireless coverage map?

Think big: Sometimes it pays to think of your base as a giant merchant, motivated by the same things that drive most business owners. Most want the freedom to focus on their core businesses and not have to worry about credit card processing.

Many look beyond the basics and try to figure out how they can have the same things that were once only available to the major players and high profile retailers. Our industry has done a commendable job of making emerging technologies available to small merchants. Many of us sell integrated POS solutions, mobile wallets, and private-label gift and loyalty solutions.

Build on success

Let's begin to incorporate some of our success stories into our selling. What problems have we solved in our respective geographies or areas of expertise? Everyone loves a good story. How can those same wins be applied across the board to other similar kinds of businesses?

If we begin with a large group, we can still tailor our discussions and solutions to the unique requirements of each prospective merchant. As PayPal and Square have shown us, all these micro merchants out there add up to one big, solid opportunity.

Dale Laszig is a writer and payments industry executive specializing in business development and sales performance improvement. She manages channel sales at Castles Technology and sales effectiveness programs through IMPAX Corp. and C3ET Credit Card Consortia for Education & Training Inc. She can be reached at 973-930-0331 or dale_laszig@castechusa.com.

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